Financial Documents That You Need to Keep

August 29, 2007 By Matthew Paulson

Whenever I travel back to my folks place, I try to throw away a few things here and there from my childhood that I no longer have absolutely any use for. I was going through my dresser and one of the drawers contained a folder with a whole bunch of documents, some relating to bank accounts that I used to have, old tuition bills, even a few certificates from high-school activities. Most people have stacks of old documents that need to be sorted through, but what documents do you keep and which do you toss?
There are something that you just have to keep around forever, such as your tax return, and any contracts that you sign. You also want to keep real estate records forever. Be sure to keep the last pay stub for any job that you leave, and the last pay stub of the year for any current job(s) that you have.

Some things you can get rid of after 7 years or so, which is the statute of limitations in most states. After 7 years, get rid of any cancelled checks, bank deposit slips and bank statements. If you sell an investment or make any home improvements, keep those documents for at least 7 years after you sell the real estate or other investment.

With any debts that you have, such as a mortgage payment, a car payment, or a student loan payment, you’ll want to keep the payment stubs and records until you pay the specific debt off. After you get the letter telling you that you’ve paid them in full, keep that letter and then you can toss all of the other documents. You should keep your credit card statements for three years, and then feel free to get rid of them.

Some things you really don’t need to keep around all that long. You really don’t need to keep old insurance statements and utility bills. You’ll want to keep your most recent insurance and utility bill statement, but there’s no reason to keep any previous statements. Feel free to toss any statements for bills that you’ve recently paid off as long as you have some documentation saying that the debt has been taken care of.

Some of these suggestions for documentation that you should keep might seem a bit excessive, however it’s far better to protect yourself than carelessly lose documents that you might need in the future. You never know when a scavenger collector will try to collect a paid debt or when you’ll be on the receiving end of a lawsuit.